To solve the housing crisis, look to our labour market

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The distortive effects of badly designed policies and creeping, burdensome regulations are mostly to blame for the issues in the housing marketCredit:
Simon Dawson/Bloomberg

The record of the 20th century shows that the difference between good and bad policies on long-run economic performance is enormous. The Western economic model that mostly trusted markets to allocate resources, set prices and solve the economic problem has outperformed and outlasted the command-and-control models of the mostly Eastern economies.

Sound money and regulation that raises competition and lowers barriers to entry are still the best ways that governments can promote rising living standards in the long run. For the most part, the desire by firms to raise profits, and by workers to raise incomes, will take care of the rest. That is, as long as they are not inhibited by excessive interference...